Your money or your life
The knives are out for Whitehall's mightiest department
TONY BLAIR once kidnapped a civil servant. It was 2005 and the then prime minister, who was heading to EU budget talks in Luxembourg, needed an economic expert. So he purloined a Treasury official. The reluctant bureaucrat was later dumped in Paris without passport or money, recalls Jonathan Powell, a former adviser, in his book “The New Machiavelli”. Oddly, the man “just wanted our assurance that we wouldn't tell the Treasury that he had been travelling with us.” If the news got out, his career could have ended.
The tale illustrates the potency of Britain's finance ministry, which has long wielded more power than its international counterparts—or, it sometimes seems, the prime minister's office. In the post-war years the Treasury was a hub for Keynesian demand management. Under Margaret Thatcher it became the engine room of a monetarist revolution. It commandeered social policy during Mr Blair's administration. Now it oversees austerity, the lodestar of the coalition government.
Yet a report published on September 4th, “The Destruction of HM Treasury”, says Whitehall's leviathan should count its days. The two authors know their stuff. Stian Westlake directs policy at the National Endowment for Science, Technology and the Arts, a charity taken seriously by Treasury types. Giles Wilkes was an adviser to Vince Cable, the business secretary.
Mr Westlake and Mr Wilkes argue that the rhythm of twice-yearly financial statements, in the budget and the autumn statement, makes the Treasury short-term in outlook and prone to headline-grabbing wheezes. Moreover, all three main parties have embraced the interventionist “sector strategies” championed by Michael Heseltine on the right and Lord Adonis on the left. Because the Treasury detests that sort of economic meddling, politicians have it in their sights. The department's functions might, the authors suggest, be distributed to an expanded prime minister's office, a stronger business department and a dedicated finance ministry.
A plan to dismantle the Treasury was pitched to—and well received by—senior Labour figures at a private seminar last winter. Shadow cabinet ministers talk eagerly about the idea, though in the ruling Conservative and Liberal Democrat parties it is more a niche interest.
Even if any of this comes to pass, however, the Treasury's mandarins will remember that governments have tried to trim their wings before. Harold Wilson's Labour government set up a new Department of Economic Affairs to rival the Treasury. It too was supposed to concentrate on long-term planning, and it too was created partly for political reasons, to appease the ambitions of George Brown, the perpetually tired and emotional deputy leader of the party. The Treasury fought it, and won. Brown moved to the Foreign Office and the upstart department was unceremoniously closed down in 1969. The lesson? Never underestimate the power, and self-interest, of the Treasury.